Marqeta's Q1 2025 Earnings: Navigating Growth and Strategic Shifts

As Marqeta (NASDAQ: MQ) prepares to report its first-quarter 2025 results on May 7, investors will scrutinize whether the payments processor can sustain its recovery amid strategic overhauls and lingering challenges. The upcoming earnings call will serve as a critical checkpoint for assessing whether the company’s focus on European expansion, cost discipline, and new partnerships can offset lingering headwinds from its Cash App contract renewal. Below are the key metrics and themes to watch.

Revenue Recovery and Gross Profit Trends

Marqeta’s guidance for 14-16% year-over-year net revenue growth in Q1 2025 marks a significant rebound from the 25% revenue decline in 2024 caused by the Cash App contract renegotiation. Investors will look for confirmation that this recovery is durable. The company’s full-year 2025 revenue growth target of 16-18% hinges on retaining existing clients and scaling newer programs, such as its first consumer credit co-brand partnership and European deals.

Equally important is gross profit (GP), which is expected to grow 11-13% in Q1 and 14-16% for the full year. A widening gap between revenue and gross profit growth could signal margin pressures, possibly from pricing adjustments or increased investments in the TransactPay acquisition.

TPV: The Silent Driver of Scalability

While revenue and gross profit are headline figures, Total Processing Volume (TPV) remains the linchpin of Marqeta’s long-term value. The company did not provide explicit TPV targets for 2025, but investors will parse management’s commentary for clues about volume trends. In 2024, TPV hit $291 billion, a 31% increase year-over-year, driven by new programs and geographic expansion. Sustaining this pace will require traction in Europe, where the TransactPay acquisition—set to close within six months—will expand Marqeta’s BIN sponsorship capabilities.

Strategic Moves and Execution Risks

The May 7 call will likely spotlight two strategic priorities:
1. TransactPay Integration: The acquisition positions Marqeta to compete more effectively in Europe, leveraging EMI licenses for card issuance. However, execution risks include regulatory hurdles and integration costs.
2. American Express Network Access: Adding Amex to its payment network options could attract fintech clients seeking broader acceptance, but success depends on customer adoption and pricing terms.

Meanwhile, the $300 million share repurchase program signals confidence in MQ’s balance sheet. Yet, investors will question whether capital allocation prioritizes growth over shareholder returns.

Risks on the Horizon

Regulatory uncertainty looms large. The OCC’s proposed rule to restrict nonbank prepaid card issuers—a market Marqeta dominates—could force costly compliance changes. Additionally, competition from fintech rivals like Plaid and StoneCo may pressure margins.

Conclusion: MQ’s Turning Point?

Marqeta’s Q1 results will test whether its pivot to higher-margin services and geographic diversification can offset past missteps. With adjusted EBITDA improving to $29 million in 2024 and net income rising to $27 million, the company is financially healthier. However, sustaining the 16-18% revenue growth for 2025 requires TPV to remain robust and strategic bets like TransactPay to deliver.

Investors should pay close attention to management’s tone on TPV trends and TransactPay’s integration timeline. If Marqeta can demonstrate progress on these fronts, its stock—currently trading near its 52-week low—could find footing. Conversely, missing revenue or TPV expectations could amplify concerns about its ability to compete in a consolidating payments landscape.

The verdict hinges on execution: Marqeta’s earnings will either reinforce its comeback story or expose lingering vulnerabilities. The market’s patience, however, is thin—management must deliver clear evidence that MQ’s strategic bets are paying off.